The Revised Draft on disciplining fisheries subsidies has weak provisions on special & differential treatment for developing nations, turning its back on the negotiating mandate
By Biswajit Dhar
In the run-up to the 12th Ministerial Conference (MC12) of the WTO, members seem to be inching closer to an agreement to introduce disciplines on fisheries subsidies. This is the perception of the Chair of the fisheries subsidies’ negotiations, Ambassador Santiago Wills. However, the negotiations have been mired in controversies, with India arguing the Draft Text of a possible agreement proposed by Ambassador Wills does not protect the interests of small fisherfolk in developing countries.
Fisheries subsidies’ negotiations were initiated after the Doha Ministerial Conference (2001) gave the mandate “to clarify and improve WTO disciplines on fisheries subsidies, taking into account the importance of this sector to developing countries”. The Hong Kong Ministerial Declaration (2005) sought to introduce disciplines on fisheries subsidies, “including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and over-fishing” and emphasised that “appropriate and effective special and differential treatment for developing and least-developed Members should be an integral part of the fisheries subsidies negotiations, taking into account the importance of this sector to development priorities, poverty reduction, and livelihood and food security concerns”.
The Sustainable Development Goals (SDGs) reinforced the mandate for disciplining fisheries subsidies; Goal 14.6 seeks to “prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU fishing, and refrain from introducing new such subsidies” by 2020. Goal 14.6 also insisted “that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the WTO fisheries subsidies negotiation”.
The disciplines on fisheries subsidies proposed by Ambassador Wills in the Revised Draft tabled in early November stipulate that no WTO member can grant or maintain (i) any subsidy to a vessel or operator engaged in illegal, unreported and unregulated (IUU) fishing (Article 3.1 of the Revised Draft); (ii) subsidies for fishing or fishing related activities regarding an overfished stock (Article 4.1); (iii) for fishing or fishing related activities that contribute to overcapacity or overfishing (Article 5.1).
The Food and Agriculture Organization (FAO), which provides the institutional mechanisms for countering IUU along with other UN agencies, explains the importance of preventing IUU thus: “[F]isheries resources available to bona fide fishers are removed by IUU fishing, which can lead to the collapse of local fisheries, with small-scale fisheries in developing countries proving particularly vulnerable”. It further explains that “IUU fishing … threatens livelihoods, exacerbates poverty, and augments food insecurity”. The FAO is, therefore, quite unambiguous in suggesting that IUU needs to be stopped in order to protect the interests of small fisherfolk.
Thus, a critical dimension of the mandate for disciplining fisheries subsidies, and preventing the proliferation of IUU, given by the WTO Trade Ministers, and reinforced by Goal 14.6 of the SDGs, was that special and differential treatment (S&DT) to developing countries must be an integral part of the outcome. However, Ambassador Wills’ Revised Draft includes weak provisions on S&DT, thus turning its back on the negotiating mandate.
If the Wills’ Draft becomes the basis for the agreement on fisheries subsidies, developing country Members, including LDC Members, can only expect limited exemptions under Articles 3.1 (IUU) and 4.1 (overfished stock). These countries would be allowed to provide subsidies for “low income or resource-poor and livelihood fishing or fishing related activities” that can be carried on up to 12 nautical miles from the coast (defined as “territorial sea”, by the 1982 UN Convention on the Law of the Sea), and for a period of 2 years from the date of entry into force of the agreement. The S&DT proposals regarding Article 5.1 subsidies, namely those deemed to contribute to overcapacity or overfishing, are still not clear. One of the proposals in the Wills Draft states developing countries can continue to use these subsidies “if its annual share of the global volume of marine capture production does not exceed 0.7%”. These minimal S&DT proposals make it explicit that the fisheries subsidies’ regime seeks to establish a level playing field between developed countries providing large volumes of subsidies for commercial fishing, and developing countries, whose fisheries sector is dominated by small fisherfolk.
India has sought to restore the balance through several proposals, two of which are particularly important. First, developing countries can subsidise low-income, resource-poor or livelihood fishing or fishing related activities within their territorial waters and their Exclusive Economic Zones, and, secondly, developing countries not engaged in distant water fishing can subsidise future fishing or fishing-related activities, including distant water fishing, for a maximum period of 25 years after the entry into force of the fisheries subsidies’ agreement. The question is, how far can India pull its weight to ensure that the WTO does not produce yet another agreement favouring the developed countries?
The author is Professor, Centre for Economic Studies and Planning, School of Social Sciences, JNU